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Colorado Joins States Reporting Price of Health Care Procedures

Colorado, by 2013, will have on-line a searchable database to allow consumers to compare health costs across hospitals and doctors. Thirteen other states have or are implementing All Payer Claims Databases, according to the All-Payer Claims Database Council.

The move by Colorado began with passage of a bill in 2010 establishing an advisory council to make recommendations on setting up the database.

In an interview with Colorado Public Radio, Phil Kalin, the official at the non profit Center for Improving Value in Health Care in Denver who is in charge of creating the new interactive system, says that initial data show great variability in prices. For instance, an MRI can cost as little at $450 or as much as $3,500. He says other states with already implemented systems show similar variability of prices with little or no evidence of difference in outcomes.

Mr. Kalin says it is still early to see if price transparency can actually drive down health care costs. "We think that as more costs get shifted to consumers, co-pays, deductibles, and as businesses and insurers put more pressure on the system, the all-payer databases are going to be increasingly looked to as important levers for making change," he said in the interview.

RAND has just completed a series of four studies on consumer-directed health plans that conclude these plans have the potential to reduce health care spending in the U.S. The latest study found that if consumer-directed health plans grow to account for half of all employer-sponsored insurance in the United States, health costs could drop by $57 billion annually -- about 4 percent of all health care spending among the nonelderly.

Information from All-Payer Claims Databases would seem to increase the likelihood that the market-based strategy of consumer-directed health plans would succeed in reducing cost.